Delhi High Court
Amira Pure Foods Private Limited vs Canara Bank And Ors. on 20 May, 2019
$~36
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 20.05.2019
+ W.P.(C) No.5467/2019
AMIRA PURE FOODS PRIVATE LIMITED ..... Petitioner
Through Mr.Ashish Makhija, Adv.
versus
CANARA BANK AND ORS. ..... Respondents
Through Mr.Vijay Kumar, Adv. for R-1.
Mr.Anshul Sehgal, Adv. for R-2.
Ms.Hina Bhargava, Adv. for R-3.
CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI
HON'BLE MS. JUSTICE REKHA PALLI
VIPIN SANGHI, J (ORAL)
C.M. No.23979/2019
1. Exemption allowed, subject to all just exceptions.
W.P.(C) No.5467/2019
1. Issue notice. Mr.Vijay Kumar, Advocate accepts notice for
respondent no.1; Mr.Anshul Sehgal, Advocate for respondent no.2
& Ms.Hina Bhargava, Advocate for respondent no.3.
2. The petitioner, who is the corporate debtor, has approached
this Court though the Interim Resolution Professional/Resolution
Professional (hereinafter referred to as "IRP/RP") appointed by
National Company Law Tribunal (NCLT) under the Insolvency &
Bankruptcy Code, 2016 with the prayer to set aside the order dated
22.04.2019 passed by learned Debt Recovery Appellate Tribunal
(DRAT) in Miscellaneous Appeal No.548/2018, arising out of OA
No.569/2018. The petitioner/corporate debtor had been proceeded
against by the respondent/Canara Bank before the Debt Recovery
Tribunal (DRT) under the Recovery of Debts Due to Banks &
Financial Institutions Act, 1993, by preferring the aforesaid OA
No.569/2018. Arising from those proceedings, the matter reached
the DRAT. The DRAT vide its order dated 15.11.2018, appointed
respondent nos.2 & 3 as Joint Court Commissioners to inter alia
take over the assets of the petitioner, including the perishable
assets, i.e. grains, as also its other assets. Soon thereafter, in
proceedings before the NCLT, in relation to the petitioner
company, the IRP/RP was appointed on 11.12.2018. With a view
to fulfil its mandate in a time bound manner, as prescribed under
the Insolvency and Bankruptcy Code, 2017, the IPR/RP
approached the DRAT for taking over the godowns/properties of
the Corporate Debtor, including its plant, machinery, mortgaged
properties and stocks of grain etc., and prayed for an early hearing.
Pertinently, the Canara Bank, which is the lender and the initiator
of the Original Application, also consented to the said application
being allowed. However, the DRAT did not consider the
application for early hearing moved by the IRP/RP and the
proceedings were adjourned. Consequently, the corporate debtor
acting through the IRP/RP, preferred W.P(C) No.3619/2019 before
this Court, which writ petition was disposed of by us vide order
dated 01.04.2009 in the following terms:-
"Though notice could not issue in view of
paucity of time, the respondents are represented. Mr.
Vijay Kumar appears on behalf of respondent No.1
and the receiver Shri Arjun Nihal Singh is also
present.
Mr. Vijay Kumar submits that the respondent
bank had given its no objection to the application
moved by the Interim Resolution Professional - who
stands appointed as the Resolution Professional, take
over the asset of the borrower company, including
both movable and immovable in terms of the
Insolvency and Bankruptcy Code 2016.
Learned counsel for the petitioner submits that
the goods are of perishable nature i.e. grains etc. and
their disposal at an early date is of utmost
importance to salvage their value. He further
submits that the Resolution Professional has to take
steps within 180 days and out of that period of 120
days is over. He is not able to proceed in view of the
appointment of the Receiver by the learned DRAT.
The keys of the premises, which is lying sealed, have
been delivered to respondent bank by the two
receivers. The premises are being guarded by the
guards deployed by consortium of banks led by
Canara Bank. The petitioner's application moved, as
early as on 24.12.2018, for the purpose of de-sealing
of the properties and delivery of the same to the
Resolution Professional is still pending. The early
hearing application moved by the Resolution
Professional has also not been entertained.
In view of the aforesaid circumstances, we
direct the learned DRAT to hear and dispose of the
applications of the Resolution Professional within the
next one week. In the interim, we permit the
Resolution Professional to inspect the premises and
the goods lying therein, and to make an inventory of
the same. He is also permitted to inspect the records.
The said inspection shall be carried out in the
presence of the officers of the Canara Bank as well as
the receivers appointed by the learned DRAT. The
receivers shall de-seal the premises so that the
Resolution Professional is able to enter the same and
carry out the aforesaid activities.
In case, the DRAT does not dispose of the
applications preferred by the Resolution Professional
within one week, we grant liberty to Resolution
Professional to move an application in the present
petition.
The petition stands disposed of in the aforesaid
terms.
Order dasti under the signatures of the Court
Master."
3. The DRAT has now passed the impugned order dated
22.04.2019 and has taken the view that in the light of the
moratorium imposed by Section 14 of the Insolvency &
Bankruptcy Code, 2016, the continuation of the proceedings
against the corporate debtor are prohibited. The operative part of
the impugned order reads as follows:-
"xxx However, this Tribunal is of the view that
the aforesaid rival submissions need not be gone
into at this stage by this Tribunal because of the
admitted position that a moratorium has been
ordered by the NCLT in exercise of its powers
under section 14 of the Code of 2016 which
prohibits continuation of any proceedings against
the corporate debtor. The present proceedings
arise out of O.A. proceedings initiated by the
bank against its borrowers and the corporate
debtor being one of the defendants in the bank's
O.A, prohibition under section 14 of the Code
will come into operation and the Tribunal will
stand prohibited from proceeding in the present
matter. In case any direction(s) which is being
sought on behalf of the Resolution Professional
and the alleged landlord of the one godown in
question is passed, the moratorium will stand
violated. Consequently, the application moved by
the Resolution Professional is dismissed. It will,
however, be open for the Resolution Professional
to have recourse to legal remedies which may be
available to it in law for enforcement of its rights
and fulfillment of its obligations as Resolution
Professional in the matter.
The application of Sidhartha Global Pvt.
Ltd. will remain pending till the moratorium
period does not expire. The grievances in the
said application are kept open to be considered at
appropriate stage."
4. The submission of learned counsel for the petitioner is that
the view taken by the learned DRAT is not legally correct. He
submits that Section 14 of the Insolvency & Bankruptcy Code,
2016, only imposes a moratorium and prohibits the institution of
pending suits or proceedings against the corporate debtors.
However, there is no prohibition against the undertaking of
proceedings which cannot be considered as being against the
corporate debtor. He submits that since the IRP/RP has been
appointed in respect of the corporate debtor, its Board of Directors
stands suspended and the IRP/RP has to now manage the affairs of
the corporate debtor. He, thus, contends that it is in the interest of
the corporate debtor that its assets, including the perishable assets,
are managed efficiently so as to salvage the best value of the said
assets. However, the appointment and continuation of the Court
Commissioners with vesting of the assets of the corporate debtor in
them, is preventing the IRP/RP from discharging his time bound
duties and the interest of the corporate debtlor is suffering.
Learned counsel submits that the effect of the impugned order is
that the Court Commissioners, appointed by the DRAT, continue
to remain in control and custody of the assets of the corporate
debtor, which would be detrimental to the interest of the corporate
debtor, as due to the non-disposal of the perishable goods in a
timely manner, their best value will not be realised.
5. Learned counsel submits that under the Insolvency &
Bankruptcy Code, 2016, Section 12 lays down the time limit of
180 days during which the IPR/RP has to achieve its mandate. The
said period is extendable only by another 90 days. Since the
IRP/RP in the present case was appointed on 11.12.2018, the said
period of 180 days will be expiring on or about 10th June, 2019.
Learned counsel has also drawn our attention to Section 18 of the
Insolvency & Bankruptcy Code, 2016 which entitles the IRP/RP to
monitor the assets and take control and custody of the assets of the
corporate debtor.
6. Since the respondent no.1/Bank has also expressed its
willingness to the IRP/RP taking control of all the assets, including
the perishable assets of the corporate debtor, there is no real
contest in the present case. We have considered the submissions of
learned counsels and are of the view that the DRAT was not
powerless to modify its own order whereby the two court
commissioners had been appointed to take over control of the
assets of the petitioner/corporate debtor. In the facts of the case,
the learned DRAT should have recalled its order so that the
IRP/RP could take over the assets of the corporate debtor in the
exercise of its mandate under the Insolvency & Bankruptcy Code,
2016.
7. We, therefore, set aside the impugned order dated
22.04.2019 passed by the DRAT in the aforesaid proceedings, and
recall the appointment of the two Court Commissioners vide order
dated 15.11.2018. We further permit the IRP/RP to act in exercise
of the power vested in it by the Insolvency & Bankruptcy Code,
2016. The Court Commissioners are directed to deseal the
premises of the petitioner/corporate debtor tomorrow i.e.
21.05.2019 at 11.00 A.M. and hand over the possession of the
same to the IRP/RP within the next two days.
8. Since the two Court Commissioners were appointed by the
learned DRAT, and they have continued to act in accordance with
their appointment, the Court Commissioners shall be paid
Rs.25,000/- each towards their fee. The said amount shall be
defrayed by the IRP/RP.
9. The petition stands disposed of in the aforesaid terms.
10. DASTI under signatures of Court Master.
VIPIN SANGHI, J
MAY 20, 2019/aa REKHA PALLI, J
